What kind of Life Insurance should I buy?

What kind of life insurance should I buy?

That’s a question that crosses the mind of many people in all walks of life.

A young person finishes school and finds a job. His/her parents offer advice that they should be wise with their money and be sure to start a good financial plan that includes life insurance. What does that mean? Well, Mom and Dad own life insurance and they have spoken about disability insurance, but have never explained how it works. Most parents probably can’t explain how these plans can be set up and more importantly how they should be set up in specific situations.

So what happens? The parents contact their agent and ask to have insurance explained to the child. They recommend that the child call an Insurance company and get their own explanation because their agent has passed away and they haven’t spoken to anyone for years or the subject doesn’t even come up and the new adult is on his/her own.

When most young people start working with a firm they are, after a waiting period, enrolled in the group insurance plan with their new employer. This is an excellent start and probably all that is necessary while the individual is single and has no family responsibility.

When this “new young employee” decides to marry and buy a new home and start a family the financial planning should start and both spouses should sit with a life insurance advisor and learn about, and add to their financial portfolio, a reasonable amount of life insurance, perhaps additional disability insurance and nowadays a critical illness benefit. How much of each will depend on their circumstances.

If they own a home that has a mortgage, perhaps a short term renewable life insurance plan with critical illness coverage, to allow the survivor to reduce or pay off the mortgage to reduce the stress of a lost income in the event of an untimely death or critical illness. The critical illness product should be considered to provide a benefit that pays a lump-sum tax-free benefit to the survivor of a heart attack or cancer victim or victim of many other conditions. The critical illness benefit, following a thirty day survival is paid tax free and can be used to reduce or retire a mortgage or pay for medical assistance away from home instead of going on a waiting list for months when the required treatment is not available.

It is advisable to set up a plan in the beginning when income is low to provide a maximum death benefit or critical illness benefit for the lowest acceptable premium and modify the plan later to lock in a longer term rate as the funds (income) increase.
In other words, start with a Ten Year Renewable and Convertible plan in both life insurance and critical illness benefit and when there is more disposable income change all or parts of the plan to long term. Lock in a rate for life rather than be subject to guaranteed renewable rates that can become very expensive as you grow older.

It is important to speak with and continue to review and revise your insurance plans as your situation changes and that could be yearly, certainly every four or five years but no longer. Make sure you always know what the insurance plan you own, will do for you and your family as they mature.

Life insurance plans often become the forgotten investment in the grand scheme of things. It is a proven statistic more people have heart attacks and are diagnosed with cancer than homes being destroyed by fire or cars being destroyed in accidents. People pay more attention to their house and car insurance than they do to their personal life insurance products for their family. After all it will never happen to me! Right? Wrong!

Pick out a good advisor, create a good rapport, and make sure you revisit your plans on a regular basis. In general most people spend less time planning and reviewing their insurance portfolio than they do their weekly grocery list.
Please visit our site: Guaranteed lowest rates in Canada and a broker will be happy to assist you at no cost or oblibation.

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Ottawa, ON
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866 341 3220
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